Commercial Space – Q2 2022
Through the first half of 2022, Silicon Valley’s commercial space indicators paint a complex picture through diverging trends, according to the latest analysis from Joint Venture Silicon Valley’s Institute for Regional Studies, in partnership with JLL Silicon Valley in their third-quarter.
Leasing volume within the region showed a surprising uptick, slightly outpacing last year’s figures and running counter to increasing vacancy rates. The pandemic-period trend toward leasing of smaller spaces continued. Asking rents have plateaued despite outsized levels of inflation reported this year, indicating a reluctance for landlords to raise rents in order to remain competitive in the market.
An uptick in leasing volume paired with a larger uptick in the number of leases continues a surprising but rational trend of a decreasing average amount of space per lease.
Although the list of construction completions remains short in Q2 2022, the magnitude of these construction projects buoyed the completion figures in square feet.
The trajectory of asking rents has nearly flattened for all commercial space types, which may help tenants absorb inflation-related increases in operating costs.